While the meme-stock mania has been fascinating, we think it is high time to focus on stocks that possess solid financial credentials and are not gaining based solely on social media hype and speculation. As such, investors should divert their attention to industrial stocks Deere & Company, (NYSE:DE), Illinois Tool Works (FL), and ABB (ABB) as examples. These companies are well positioned to benefit from President Biden’s proposed infrastructure spending plan. And, since they have maintained healthy balance sheets and possess sound fundamentals, we believe they are much safer bets than volatile meme stocks. Let’s discuss.Although the stupefying gains by meme stocks this year have been fascinating, they don't make sense from a fundamental standpoint. Meme stocks such as AMC Entertainment Holdings, Inc. (NYSE:AMC), BlackBerry Limited. (NYSE:BB) and GameStop (NYSE:GME) have been dominating headlines for some time now due to an explosive surge in their prices spurred by retail trading commentary on subreddit r/wallstreetbets.
And although it might be tempting to jump on the meme-stock bandwagon to capitalize on the trend, betting on them can be extremely risky. That’s because for most meme stocks' weak fundamentals and financials do not justify their current price levels. Hence, ignoring the hype, we think it is safer and better to invest in stocks that are fundamentally sound.
As U.S. manufacturing and construction activities gradually return to their pre-pandemic levels, betting on industrial stocks Deere & Company (DE), Illinois Tool Works Inc. (NYSE:ITW), and ABB Ltd (ABB) could be safe and rewarding. Furthermore, the Biden administration’s proposed infrastructure plan could provide a shot in the arm to these companies. Given their solid financials and fundamentals, we believe these stocks have plenty of upside to deliver.